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Editorial

Damage control

Obama tries to minimize political fallout from his health-care fiasco

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Friday May 30, 2014 5:16 AM

The more people know about the federal health-care overhaul, the more they dislike it. This
increasingly scares backers who insisted its popularity would grow.

In this context, a report in
The New York Times over Memorial Day weekend takes on greater meaning. The story revealed
that the Internal Revenue Service has issued a rule that punishes employers that end
company-sponsored health plans and dump employees onto the new government health-care
exchanges.

Many companies already had done the math and determined that they would be better off paying a
relatively small $2,000-per-worker penalty and sending them to exchanges for insurance
coverage.

Ezekiel Emanuel, one of the architects of the Affordable Care Act, even said a couple of months
ago that the law would have the eventual impact of replacing employer-provided health insurance
because of this economic incentive,
The Wall Street Journal pointed out this week.

Until this past weekend, the administration never had stated that this would be considered an
end-run around the vastly complex and ill-conceived law.

The new IRS rule says companies will be subject to a tax penalty of $100 per day for each
employee sent to the individual marketplace.

What happened? According to the
Times, “the Obama administration raised objections . . . in consultation with other
agencies.” Based on other politically expedient changes, James Taranto of
TheWall StreetJournal has a theory: “If employers start dropping medical benefits, the number of people
directly victimized by the you-can-keep-your-plan fraud would multiply, and with it Obama and the
Democrats’ political problems. Thus the administration is in the ironic position of writing
regulations to make sure its ‘comprehensive reform’ isn’t too comprehensive.”

The move is an acknowledgement that many who have gone to the exchanges have found the policies
more expensive and less desirable than expected. The law has made things worse for millions of
Americans in the name of extending coverage to a relatively small number of people.

Meanwhile, the law also is throwing a wrench into labor negotiations. Union leaders, who have
strongly supported Obama, are fighting with public- and private-sector employers around the country
over who will pay the added costs imposed by the law.

In Las Vegas, the
Wall Street Journal said, about 2,000 service workers are poised to strike next week if
they can’t reach an agreement with downtown casinos over health costs. It’s also a thorny issue for
union employees of Philadelphia’s regional transit system, SEPTA, which estimates its health costs
will soar by 12.5 percent, or $15 million a year. A report earlier this year estimated that the
city of Columbus’ health-care premiums will increase about 8 percent annually over the next few
years.

Also tucked into the
Times story over the weekend was the fact that Health and Human Services has agreed to
reimburse insurance companies for “unexpected financial losses” this year — aka, provide a bailout.
The
Times said the administration hopes the move will “prevent rate increases that could
embarrass Democrats in this year’s midterm elections.”

It’s hard to keep up with the combination of incompetence and cynicism on the part of this
administration as it tries to save itself from its own law.